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Investment Bank Moelis Pops In Market Debut

Shares of investment bank Moelis & Co were in the green following its Wednesday morning trading debut. Midday the stock was up more than 5.8% from the company’s $25 initial public offering price. Shares opened at $27 before quickly peaking at $27.22.

The pop came after the independent firm priced shares below its expected $26 to $29 range. With 6.5 million shares sold in the IPO, the company raised $162.5 million (prior to any additional sales to underwriters). Moelis had hoped to sell 7.3 million shares.

The company was founded by Ken Moelis who left a top job at UBSUBS to start the firm in 2007. According to SEC paper work filed in March, Moelis & Co. generated $411.4 million in revenue last year and brought in $70.2 million of profit, up 99% from the prior year.

The IPO filing comes at a time when big investment banks like Goldman Sachs are increasingly seeing a slowdown in their key fixed income trading businesses. But at the same time, some smaller advisory firms like Lazard and Evercore PartnersEvercore Partners are seeing some success. In its securities filings, Moelis & Co., clearly argues that independent advice is in high demand. In 2013, 80% of the top 10 announced M&A deals and 75% of the top 20 announced M&A deals included independent advisors, the IPO filing says.”

In an interview with CNBC Wednesday morning Moelis reiterated his feeling that independents have an advantage saying,

The political pressure on the large financial institutions is unbelievable. As I said I’ve been around 33 years in the business and I don’t think I’ve ever seen this regulatory pressure on the big financials. I think the talent will come out. I think clients will want the more flexibility of an independent, un-conflicted advisor and I think the growth has a long way to go.”

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